MobiKwik's $67 mn IPO fully sold in first hour as retail investors rush in

Retail investors placed bids for nearly five times the shares reserved for them, while the portion for non-institutional investors was fully sold

Indian financial technology firm MobiKwik's Rs 572 crore ($67.4 million) IPO was fully subscribed within the first hour on Wednesday as investors bet on the company's growth in a booming domestic online payments market.

Overall subscription was 3.4 times the 11.9 million shares that MobiKwik put on offer as of 1 p.m. IST, with retail investors bidding for more than 14 times their reserved shares and non-institutional investors for thrice their portion, exchange data showed.

MobiKwik, founded over a decade ago, sold shares worth Rs 257 crore on Tuesday to anchor investors including Norway's wealth fund Norges, HDFC Mutual Fund and Quant Mutual Fund. Its existing investors are not selling shares.

With smartphone use booming, millions of Indians make online payments for everything from groceries to flight tickets. That has opened the door for fintech firms to operate in a consumer-facing market, including offering loans as well as run payment gateway solutions, like MobiKwik does.

The value of digital payment transactions in India is expected to double to Rs 593 trillion in fiscal year 2028-29 from Rs 265 trillion  in 2023-24, according to PwC.

Analysts said a strong grey market premium for MobiKwik's shares - which indicates how the stock could perform on listing day based on trades in the unregulated market - was attracting retail investors.

"The primary reason for a quick oversubscription is a strong grey market premium of about 50 per cent to the issue price, a good listing pop is expected" said Arun Kejriwal, founder of Kejriwal Research.

The firm is taking bids from Dec. 11-13 in a price range of Rs 265-279 per share, targetting a Rs 2,168 crore valuation. The stock is likely to start trading on Dec. 18.

India's IPO market has boomed in 2024 despite a brief blip in stock markets in recent months, with nearly 300 companies raising over $15 billion as of mid-November, more than double of last year, data compiled by LSEG showed.

MobiKwik had filed for a Rs 1,900 crore IPO in July 2021 but shelved those plans after the dismal market debut of larger rival Paytm that year. It has since slashed its IPO size by 70 per cent.

Successful listings in the technology space, including that of food delivery platform Swiggy , and a revival in Paytm's shares from lows is boosting sentiment, said Kranthi Bathini, director of equity strategy at WealthMills Securities.